Photovoltaic Solar Power: The drive towards grid parity
Each day you look up and see the ball of energy we call the sun, it is a reminder that the source of clean, renewable energy that the world is waiting for is already here, if we could just learn to use it. Worldwide we use a lot of energy in a year, but the sun supplies that much energy to the earth each hour. One method of collecting that energy and using it to power our homes and businesses is based on photovoltaic (PV) materials that can be formed into solar panels.
How do PVs work? When solar light impinges on the surface of a semiconductor material (these are the materials used in computer memories or microprocessors as well as LEDs) it creates electric charges that can flow giving us electricity. Systems to provide solar power generally require large areas of PV materials wired together to provide useful power levels in addition to inverters to convert the dc current to ac and possibly storage systems to support power delivery after the sun goes down.
There are many different semiconductor materials that can be used for PV solar cells and different suppliers emphasize different materials, each with its own pros and cons. The highest efficiency cells use crystalline silicon, the same material used for most microcircuits. In this form, solar conversion efficiencies run about 20-22%, with the benefit of needing a smaller surface area than for less efficient technologies, but also run the highest cost. Solar cells can also be made of polycrystalline silicon where efficiencies run lower, about 15%, but the costs are lower too. Another solar cell material is based on cadmium telluride thin films. These materials can be put on low cost glass substrates so that manufacturing costs as low as $1.14/W are claimed, though solar conversion efficiencies run about half of that for standard silicon solar cells. At these efficiencies you need a 2ft by 4 ft panel to generate about 70 W under peak solar conditions.
Photovoltaic solar cells, though still providing a negligible portion of world energy needs, are very attractive as a renewable energy source and a means of generating power without contributing additional climate changing greenhouse gases. The problem is that photovoltaic systems are still very expensive relative to fossil fuel sources. Demand is currently growing very rapidly but that demand is artificially created by government mandates and subsidies. Costs currently run as high as $0.25/kwh for PV systems and would have to come down by a factor of two to reach the ‘grid parity’ associated with the power generation cost of fossil fuels and be competitive without subsidies. The good news is that costs are projected to come down over the next several years and the ‘grid parity’ objective may be within reach. The lower costs are being driven by new technologies, less expensive production processes, and the reduced costs that come with higher volumes.
There are over 100 companies now involved in the manufacturing and distribution of PV solar cells. Some are part of large multi-nationals like BP solar, or GE Energy and others are dedicated to this industry. If you take a look at some of the pure-plays in the industry, some of the excitement in this form of renewable energy becomes apparent. SunPower Corp, San Jose, CA is a manufacturer of the high efficiency, crystalline solar cells and had sales of $775 M in 2007 and is running at double that sales rate in 2008. They foresee their manufacturing costs dropping by a factor of 2 by 2012. In 2008, their production capacity will be extended to 400 MW. (Each MW is comparable to the electric power needs of 250 homes). Also, there is Evergreen Solar a Marlboro, MA company, specializing in new production techniques, called ‘String Ribbon’ for polycrystalline silicon solar cells. Evergreen Solar is also growing rapidly and is making major investments in their new Quad-furnace production capacity, including forecasting 160 MW/year production capacity by 2009 in their Devens, MA factory. Evergreen is making similar expansions in their Germany joint venture. This company too forecasts halving production costs by 2012 due to improved production techniques and increased efficiencies. Also look at First Solar of Phoenix, AZ, which claims the least expensive solar cell manufacturing technique based on cadmium telluride and also expects to half its production cost by 2012 and achieve grid parity. First Solar is also expanding rapidly going from 200 MW production capacity in 2007 to 1000 MW in 2009.
The significant capital investments being made by photovoltaic companies is a clear indication of the confidence investors have in the future cost-effectiveness of this form of solar energy and could soon herald a major change in the acceptance of renewable energy worldwide.